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Transport costs now being tracked in regional Australia

shutterstock car rural road 450x250

Expensive petrol and sparse public transport, but no tolls.

Transport costs have been soaring higher recently, according to the Australian Automobile Association's (AAA) March quarter Transport Affordability Index. However, two pieces of good news came in the newest June quarter update.

Firstly, transport costs have stopped rising and have actually rolled back slightly, with Australians only spending an average of 13.4% of their household income on transport, down from 13.6% the previous quarter. Sydney was the exception with average yearly transport costs rising slightly from $22,223 to $22,268.

But overall transport expenses dropped, thanks largely to lower car loan interest rates and falling petrol prices. This was overall more than enough to offset increasing car insurance prices.

The second piece of good news is that key centres of regional Australia are finally being included in the AAA index. Transport costs in these areas will now be more closely tracked than ever before and can be compared to the capital cities for the purposes of informing policy decisions.

Regional areas being tracked

A following cross-section of significant regional centres around Australia is now being included:

  • Wagga Wagga
  • Geelong
  • Townsville
  • Bunbury
  • Mount Gambier
  • Launceston
  • Alice Springs

The inaugural regional transport affordability metrics showed, on average, lower transport costs for residents of these areas than urban-dwellers and a very consistent cost range. The most expensive is Geelong, spending on average of $14,430 per annum on land transport, while the cheapest is Wagga Wagga, spending an average of $13,258 per year.

What accounts for differences in city and regional transport costs?

The report noted several factors that drive transport costs upwards in regional areas, and assumed that a regional household does the following:

  • Drives longer distances on average
  • Pays more for petrol, by as much as 12c more per litre in some places

It also noted factors that decreased average costs considerably, and supposed that regional households do the following:

  • Pay less for registration and insurance on average
  • Don't pay for public transport or tolls, due to low or no availability in regional areas

The report notes that "transport is a significant and largely unavoidable cost to households" and urges governments at all levels to consider these cost pressures when formulating policies. With the inclusion of regional areas, governments now have more to consider when formulating policies that will affect different areas.

Regional areas saw their growth in property sales outpace the capitals in 2016, and Optus announced in July 2017 that it would commit $1b to the development of mobile networks in regional areas. Regional areas have also continued to boom as Australia's domestic tourism favourites. With the continuing growth in regional Australian investment and development, it's likely that other areas will be added to the Transport Affordability Index over time.

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